A Low Cost SMTP vs. a Full Featured ESP: Which Should I Choose?

The email marketing world is full of open-ended questions. How should I phrase a subject line? What’s the best time of day to send out an email? What kind of deals are best-received?

Serious emailers ask themselves these questions and test to find the answers. But there is another type of question, one that can’t easily be answered by testing.

Raising response rates is critical to improving your results, and the ability to effectively send large numbers of emails (newsletters, special offers, etc.) can be enhanced by using an email service provider (ESP) or an SMTP Relay. But another element that can greatly affect ROI is reducing your email marketing costs and operational overhead.

Two types of email marketing systems

Today you have a choice between different types of email service providers with equally different price tags. The two main classes of providers are SMTP Relay Services and Email Service Providers. Will a difference in cost be justified by a difference in results? To fully understand which type of provider is right for your business, it is important to understand the differences between them.

Low-cost cloud SMTP relay services

SMTP relay services, like Amazon SES, Dyn, or many others, are an option for advanced emailers. Using such a service can require users to configure an API or SMTP in order to send emails. Moreover, most SMTP relay services often only provide a limited user interface, leaving users on their own to handle matters such as:
• List management and managing multiple mutually exclusive lists
• Campaign and segmentation management
• Management of email content libraries, template libraries and image libraries
• Aggregated reports and analytics per logical groupings such as campaign
• A/B testing campaigns and event-based campaigns
• Bounce handling

Advanced users who are proficient with these issues can greatly benefit from using an SMTP relay service. The pricing is often very attractive (less than $20 for 100,000 monthly emails) and, to many users, the right price is worth a lot.

Email service providers with another level of service

Email service providers offer another level of service. Their price, however, is also on another level (could be $300 for 100,000 monthly emails). These services also send through SMTP infrastructures, usually their own, but offer enhanced UI, making it more user-friendly for non-technical people to easily do all core email marketing tasks.

From user-friendly editors for composing emails to UIs for easily setting up, launching and tracking email campaigns – ESPs can offer increased usability for some organizations. Their higher prices also often include more support, and some even go as far as offering email marketing consulting services and full-service email marketing, all for additional costs.

How do you choose?

Is a low-cost SMTP right for you? Would you benefit more from a full-featured ESP? There is no right answer that applies to all users. There is, of course, another option – and that is to use both. I have seen companies that are actually using several ESPs or an ESP with SMTP relays at the same time.

Some organizations might use an SMTP relay for triggered emails, and an ESP for bulk emails. The tricky part comes when you then want to get aggregated performance stats from both of those operations.

Is an SMTP relay something to consider? Ask yourself these questions:
1. What type of emails am I going to send and who will be sending them?
2. With the number of emails I am sending, will it really make a difference in my wallet?
3. Does my team or agency have the technical skills needed?
4. What are my front-end and reporting requirements?

Making a conscious decision

Whether you choose to recduce your costs by using an SMTP relay service, or maximize the available features by using an ESP, or combine the benefits of both, make sure to always make a conscious decision. I invite you to share your comments on which type of email service you are using and why.

About Noam Rotem

Noam Rotem is a Sr. Marketing and Product Manager at Ongage. Ongage, makes the world’s first email marketing front-end platform that seamlessly connects to multiple ESPs and SMTP relays. The platform provides the ability to test and use multiple ESPs so you can find the best ESP for each audience, improve email delivery rates, increase performance, load balance costs, automate email marketing and boost overall ROI.